One of the mathematical realities is that when real estate prices have come down like they have here, you can often take advantage.  Here are some of the key drivers and some gotchas.

  • This only works if you can find a buyer for your current place.
  • This only applies if you want to move up to a higher value property.  If you're just cashing out or downsizing, this math won't apply (or in the case of downsizers, would be reversed in a bad way).
  • If you can find a buyer for your current place, but you're one of the bears who thinks prices will come down much more in the near future, it would still make sense to wait.     

All those caveats aside, if you can find a buyer, want to move up, and you think prices are going to be pretty stable or we're at the bottom, now is a great to upsize.  As an example, if you bought a condo for $400K in 2005 and could have sold it in 2007 for $460K but now can only sell it for $380K, don't assume it's a net loss.  If you decide to move to a larger unit or perhaps a town home that would have cost $650K in 2007 but now can be had for $550K, you "lose" $20K on your condo sale but save $100K on your new place.  
Another way to think about it is if you wait till the market is hot to sell your current place, you'll be selling into a hot market but you'll also be buying into a hot market for your next, more expensive place.  
Two alternate scenarios are non-simultaneous transactions.  One is where you sell into a hot market and then buy when the market softens. These people are the biggest winners but the opportunity to do this has passed and it's hard to know when the market is about to turn.  


The other is where you buy into a hot market and subsequently sell into a cooler market.  These people are the most unfortunate lot since they pay top dollar for their new place and sell their old place at a discount.  My advice is if you can find a buyer and need to move up, now's a great time.  


Here's a related article explaining on Seattle couple that did this from MSNBC.